On top
of the existing internal problems
of «lowflation,» shorthand for ultra-low inflation, weak demand and anemic credit growth, the deterioration in the external backdrop over much
of 2014 — rising geopolitical tensions with Russia, and the slowdown
of the Chinese economy and many other emerging markets — has made a rapid return to meaningful growth across the eurozone unlikely, in our view,
despite some positive
signs, including the
stabilization of many peripheral economies and the boost in competitiveness from the weaker euro.